SME stock funds outperform others from strong secondary market

SEOUL, April 19 (Yonhap) -- Stock funds invested in small and medium-sized enterprises (SMEs) outperformed others so far this year as the secondary market KOSDAQ made large gains, data indicated Thursday.

According to the fund appraising site KG Zeroin, local stock funds with net assets of over 1 billion won (US$938,086) and managed for longer than two weeks recorded an average return of minus 0.53 percent this year as of Tuesday.

SME-based funds were the only ones in positive territory, with a gain of 1.79 percent. K200 index funds logged a minus 2.71 percent profit, and dividend stock funds minus 2.83 percent. Regular stock funds showed minus 0.31 percent.

Market watchers say the strong showing by health stocks, including pharmaceuticals and bio, buoyed the SMEs market. The main KOSPI fell 0.41 percent this year, while the KOSDAQ rose 12.33 percent.

"Bio shares had good results after the start of this year," Kim Hoo-jeong of Yuanta Korea Securities said. "The returns from SME funds with these shares in their portfolios were good."

SME funds drew investment money as well. As of Tuesday, the funds received 54.06 billion won, the only ones that increased assets. Some 26.09 billion won left regular stock funds, while 100 billion won was withdrawn from themed funds.

"There are expectations that government measures will boost the KOSDAQ market," Oh On-su of KB Securities Co. said. "The buying trend is leaning toward SME stocks."

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